NEW YORK - The dollar held firm Friday as traders consolidated positions and awaited next week's meeting of the US Federal Reserve and Group of 20 summit.
The euro eased to 1.4706 dollars at 2100 GMT from 1.4740 dollars in New York late Thursday, when the single currency hit its highest level in almost a year.
The US unit edged up to 91.35 yen from 91.03 yen.
The dollar hit a seven-month low of 90.16 yen on Wednesday after Japan's new finance minister suggested the authorities would not intervene on the markets to weaken the rising yen.
Dealers said that with little new data, there was no fresh lead to follow and so investors took some profits.
Analysts said that despite the latest move, the market was moving away from the safe-haven dollar as the global economic recovery gains momentum.
"The dollar experienced some much needed relief during overnight trading as the recent selling frenzy halted in response to substantial declines throughout global equity markets," said Michael McGrath at PNC Bank.
"However, any gains in the greenback remain temporary as the accelerating global recovery continues to bolster demand for higher yielding assets."
Boris Schlossberg at Global Forex Trading said that "the dollar's fate is now depended on the direction of US short term interest rates" but that he expects the Fed to hold rates near zero next week and for the near future.
"Despite some improvement in US economic data there is a myriad of reasons for Fed remaining stationary for the next 12 months," he said.
Neil Mellor at Bank of New York Mellon said the G20 summit was keeping investors cautious. Although the summit was expected to discuss the easing of some stimulus measures, the outcome was unclear.
"With the G20 looming at the end of the week, investors should be on their guard as the meeting's contingent air their views and goals in the face of apparent discord on the proposed agenda," Mellor said.
"The coming G20 meeting in Pittsburgh could well prove to be a decisive moment for the markets in 2009."
The British pound meanwhile fell sharply after news that the country's public finances plunged further into the red in August, striking a record deficit for the month under the weight of a deep recession.
In late New York trade, the dollar stood at 1.0299 Swiss francs from 1.0283 Thursday.
The pound was at 1.6228 dollars after 1.6445.
- AFP /ls
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